The Secret Plan for the Conference Center

The Ann Arbor downtown conference center has been the focus of a very well-oiled machine that has been functioning for well over a year, and most Ann Arbor residents haven’t even heard the sound of gears. Now we can offer a peek behind the curtain, thanks to an opportunity to look at the secret plan (made possible by an anonymous source).

As we reported earlier, the city of Ann Arbor has sold bonds slightly in excess of $49 million to fund an underground parking garage beneath the Library Lot. That project began with a DDA resolution in September 2008 and passage by council of the bond resolution in February 2009. That bond transaction is now complete, despite the lawsuit filed by the Great Lakes Environmental Law Center.

But while there has been some public discussion about the underground parking, little has been said about what will happen on the surface above it. Roger Fraser provided a hint in his presentation to the Council during its retreat in January 2009; as we reported earlier, he said that “a group of folks…have made some conceptual plans” “at their own risk” to place a small conference center on top of the current Library Lot, using a “partnership” with the city, the DDA, and the private sector. But that proposal has been held in secret by the City, and a FOIA request by local attorney Karen Sidney was denied. Talks were, however, already going on, and CM Sandi Smith, also a longtime DDA member, called a meeting of councilmembers as early as January to discuss plans for the top of the structure; Smith then introduced a resolution calling for an RFP that has now been released. Meanwhile, with little fanfare, the City of Ann Arbor’s Downtown Plan as amended suddenly has a section that calls for a conference center downtown.

The question of course, is: will this RFP truly be an opportunity for many competing ideas for the best use for the top of the underground parking structure? Or it is merely a vehicle for a “done deal” to put into place the secret proposal mentioned in January? My conclusion: it is “wired”. Not only were the time frames very short for another proposer to come up with a fully fleshed proposal, but this one has a great deal of firepower behind it.

The proposal states that its vision is “To aid Ann Arbor in becoming ‘the’ conference destination, particularly for a knowledge-based niche market intelligence.” The team, called Valiant Partners LLC, includes two people with strong connections to the University of Michigan: Fritz Seyferth and New York resident Bruce Zenkel, a major donor to the Ross School of Business and UM Athletics. Michael Bailkin, a dealmaker from New York who has specialized in real estate tax breaks and Keith D. Coe, the CEO of VF Hotels, are the other impressive team members.

The proposal calls for a very tall, thin hotel on the north side of the lot, over a low flat building that comes up to the streetside but allows for a public plaza behind it. At street level would be retail shops and office, with a conference center above them. The roof of the conference center would be a summer/winter garden (open to the public for outdoor events) with yes! a skating rink for winter. It would include a 8,000 square feet ballroom where 1000 people could sit for dinner.

It is evident in reading the proposal that the very general requirements of the RFP will fit it perfectly. I’ll review some of those congruences and the interesting financial aspects of the proposal in a later post.

UPDATE: In a comment on the Ann Arbor Chronicle, the editor, Dave Askins, pointed out that changes to the downtown plan to include a conference center were mentioned in a story he wrote last November. It was a mention at the end of the story without any location designated. The implementation of the plan is not yet complete and Council has postponed final consideration; the version on the website was adopted by the Planning Commission on May 19, 2009.

SECOND UPDATE: See also Ed Vielmetti’ s comment below regarding early discussions of a conference center in fall 2008. It is clear that this part of the “machinery” has been in place for some time and my description of its appearing in the A2D2 plans “suddenly” was a solipsistic response on my part.

THIRD UPDATE: AnnArbor.com, in their August 24 story on this project, interviewed one of the principals (Fritz Seyferth) and confirmed that a proposal is in preparation for submittal to the city in response to the RFP. “Representatives for a group of private investors from New York confirmed today they’ll be submitting a proposal for a hotel and conference center project, potentially costing $30 million to $50 million to build, and involving a public-private partnership. Details of the potential partnership have not been disclosed.” In the story, Seyferth is quoted as saying that he hopes the project will enhance the city as a center for high-concept, high technology discussions. Again quoting from AnnArbor.com, “We pride ourselves in the Midwest as being a hub of remarkable intelligence in Ann Arbor…We’re trying to say, ‘Why don’t we create a center here where we attract those people?’”

Concentrate, in their follow-up, also attempted to interview Seyferth but were only able to obtain a general comment by email. The Concentrate article indicated that the group of developers had leaked details about the project; however, there seemed to be no fresh material beyond what we have already posted.

9 Comments on “The Secret Plan for the Conference Center”

There are, of course, multiple emails from Mayor, Greden and Hohnke (cc:ed to Sabra Briere, Sandi Smith Tony Derezinski, Chris Taylor and Stephen Rapundalo) sent in February-April 2009 that answer emails from constituents. In those emails, they write that there are no “formal” plans for a convention center, nor were there plans to build anything atop the underground parking garage.

Greden said the same thing at the Third Ward debate. LuAnne, of course, pointed out that he was being disingenuous.

A leaked proposal about one week after the RFP was issued certainly indicates it is part of a pre-arranged plan. IF this proposal has actually been submitted to the city, I hope your leak is not from a city official, since that indicates laws were broken. I find it odd that successful and sophisticated developers would leak a proposal, since that lets the competition see their bid. Could it be that this leak is a deliberate misinformation campaign?

I found the proposed revised downtown plan with a revision date of August 29, 2008 on the city web site, with this relevant text. This was a document in the A2D2 area of the city site that I reached by search.

The relevant text re the conference center reads as follows:

lAnD USe
Conference/Civic Center
Goal: Support the private development of a downtown conference/civic center within the Core
area. Further investigate the costs and benefits of public funding participation in the construction
and/or operation of such a downtown visitor attraction.
A downtown conference center could have a significant, positive impact on the downtown economy,
especially its retail sector.
If a public commitment is to be considered, these will certainly have to be quantified under alternative
participation scenarios and compared to the potential benefits which downtown might derive from a
similarly-sized conference center located elsewhere in the community.
Recommended Action Strategies
(1) Amend the zoning ordinance to allow a conference/civic center within downtown’s Core
area as a special exception use subject to the condition that substantial evidence of economic
reasibility is provided.
(2) Evaluate the costs and benefits of any public financial participation in the development
and/or operation of a downtown conference/civic center.
(2) Encourage a facility design which can serve local as well as out-of-town meeting needs and
which contributes to the quality of the pedestrian environment on adjacent streets.

Thanks for this good research. The timing is consistent with the discussions going on at the DDA in support of the underground parking structure in fall 2008. Note that in these early discussions, the conference center location is not discussed, apart from “downtown”. I’ll admit that I missed those early mentions of the conference center, but they fit in with the evidence of long-term planning to bring the current plans to fruition.

The RFP says there must be a financial return to the city but the plan amendment talks about “public funding participation”, which sounds like public subsidies. The website for Stephen Ross’s company, The Related Companies, says the company has become experts at financing government sponsored programs. Perhaps this group has found new creative ways to put city taxpayers on the hook for even more than the $50 million parking structure.

Karen, Ice Rink is a public amenity! So it makes sense for the city to give the land away, to issue a bond in support of this private project, require the rest of us pay the infrastructure costs, and make up the difference in taxes for 20-30 years so we’ll be the beneficiaries of a $100 million dollar “public” skating rink. We’ll be welcome to use it as long as we comport ourselves in a manner inoffensive to corporate sensibilities. Doesn’t this seem sensible?

Anybody remember Calthorpe? Though the “charettes” were largely an exercise in keeping-the-little-people-believing (one of those “input events” designed to promote the appearance of open local government), some mistakes were made. A very clear preference for a publicly owned civic space sited on the Library Lot escaped into the open. This espoir was not helpful to the project for maximum speculation.
The citizens who bothered to participate knew that this space was the last chance Ann Arbor would ever have to develop a town square downtown, as there is no other centrally located parcel that could accommodate this dream of the citizenry. The fact that it also aligns with the principles of “new urbanism” is one of those aspects of this ism that is conveniently neglected when it comes to implementing the recommendations. Joan Lowenstein, in one of her farewell blurts, stated that a public square was not going to happen that “they” had already provided “us” with a park nearby–Liberty Plaza. That’s enough. Take that you rabbley citizens.
Convention centers have ravenous appetites for public funds. Have a look at the dead zone created by the Javits Center on 34th St. and 11th Ave. Expect the next transfer of Ann Arbor public funds from the citizens to the Fraser-Bernstein Convention Center in the form of tax credits and perhaps even another bond for a project that will add nothing to our civic life and will suck resources that should be spent in support of local business. We’ll see the flourishing of retail equivalents of bar louie, while local business goes on the skids. I can taste the sour mix already.